Innovative Finance No.1 Cornered... Kookmin Bank Union Says "No Re-designation"

Press Conference Urging Cancellation of Innovative Financial Service Designation for LiveM

[Asia Economy Reporter Park Sun-mi] KB Kookmin Bank’s ‘Liiv M,’ the first designated innovative financial service by the Financial Services Commission (FSC), is facing difficulties due to discord between labor and management ahead of its service extension decision.

On the 22nd, the KB Kookmin Bank labor union held a press conference at 10:30 a.m. in front of the FSC, urging the cancellation of the innovative financial service designation for Kookmin Bank’s MVNO business, Liiv M. Since being selected as the first innovative financial service by the FSC in April 2019, it has been the first in the financial sector to provide mobile communication services. However, the conditions set to ensure that the telecommunications business does not interfere with the bank’s core operations have not been properly observed, increasing the workload burden on bank employees, which is the main issue raised.

The KB Kookmin Bank labor union stated, "Various unreasonable measures by the bank to boost MVNO business performance are interfering with the bank’s core operations and pushing employees into additional performance pressure." They also revealed, "Earlier this year, we submitted a petition to the FSC requesting the cancellation of the innovative financial service re-designation."

Innovative financial services are part of a sandbox system where the government temporarily relaxes related regulations to allow financial companies to commercialize innovative services. After the initial selection, regulatory exemptions on business activities are granted for two years, and upon review, an additional two-year exemption can be granted if the service extension is approved.

Kookmin Bank, having its MVNO business designated as the first innovative financial service in April 2019, believes that continuing the combined financial and telecommunications business will positively impact both the bank and its customers. Accordingly, it applied for a service extension to the FSC in January. The review process is currently underway, with the extension decision expected before April.

The labor union’s opposition to Kookmin Bank’s MVNO business poses a significant burden for both the bank and financial authorities ahead of the FSC’s re-designation decision. While the union’s opposition itself may not decisively affect the FSC’s review, there is concern that the re-designation could exacerbate labor-management conflicts, potentially causing harm to financial consumers.

Kookmin Bank claims to be engaging in smooth dialogue with the labor union to resolve issues for the business re-designation, but the union counters that the management has not made any attempts to contact or consult with the labor union regarding the MVNO innovative financial service re-designation, raising their opposition voice.

Currently, the Liiv M service operates with one Liiv M manager assigned per PG (Partnership Group), which typically consists of 5 to 7 Kookmin Bank branches, to serve customers. Due to discord between labor and management, active promotion of the Liiv M business using branches has not been effective, and although the service is approaching its second anniversary, the number of Liiv M subscribers falls far short of the initial target of one million, not even reaching 100,000.

This content was produced with the assistance of AI translation services.